Last ‘Panera Cares’ Pay-What-You-Want Restaurant Closes Its Doors Due To Failed Business Model

3:25 PM 02/06/2019 | US

Matt M. Miller | Contributor

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The last remaining Panera Cares restaurant., a pay-what-you-can nonprofit restaurant chain associated with the Panera Bread brand, is set to close its doors on February 15, in Boston.

The Panera Bread company opened the Panera Cares nonprofit in 2010, establishing locations in several major U.S. cities including Dearborn, Michigan; Portland, Oregon, Chicago and Boston.

The Panera Cares idea was developed by the company’s founder, Ron Shaich, who pitched the possibility of having suggested donation amounts for customer purchases rather than fixed prices and would only pay what they could or wanted to for food items. (RELATED: Panera To Open More ‘Pay-What-You-Want’ Stores)

In a TEDx talk from 2010, referring to the opening of Panera Cares, Panera founder Shaich said, “In many ways, this whole experiment is ultimately a test of humanity,”.

The nonprofit was not financially viable, and one by one locations closed across the nation due to the flimsy and unsustainable business model. Reportedly, the Portland location had only been returning 60 percent to 70 percent of its overall cost.

The steep losses were pinned on students who would come in large groups and eat without paying, as well as homeless people who would sometimes eat there for every meal without paying.

In 2016, the Dearborn restaurant, followed by the Chicago and Portland locations closed their doors, as the Panera Cares business experiment began to fade out. As the Panera Cares pilot location in St. Louis closed in 2018, Shaich commented to the St. Louis Post Dispatch, “We were on a month-to-month lease and the store requires significant investment. The nature of the economics did not make sense.”

JAB Holding Co. emailed a statement to Bloomberg on Monday conceding that the Panera Cares project had failed.

“Despite our commitment to this mission, it’s become clear that continued operation of the Boston Panera Cares is no longer viable,” the statement read. “We’re working with the current bakery-cafe associates affected by the closure to identify alternate employment opportunities within Panera and Au Bon Pain.”